NiSource battery storage subsidiary GenCo signed a long-term agreement on October 15, 2026, that carries approximately $2.2 billion in expected storage payments. AGP Group will develop, construct, own and operate the planned system, while GenCo will supply its charging electricity and control dispatch under the agreement.
Key Takeaways
- GenCo will receive the battery project’s economic benefits rather than own it outright at the outset.
- The agreement remains conditional on construction and interconnection contracts being executed by January 31, 2027.
- First-phase commercial operations are expected by December 1, 2027, not yet completed.
Table of Contents
- How the NiSource battery storage agreement works
- Payments cover long-term access, not an upfront purchase
- Contracts and approvals remain execution hurdles
- Conclusion
How the NiSource battery storage agreement works
NiSource Generation Company LLC, known as GenCo, entered into the tolling agreement with Atlas Storage 1 LLC, an indirect subsidiary of AGP Capital Holdings Pte. Ltd. The stand-alone battery project is planned to connect to the transmission system operated by the Midcontinent Independent System Operator, or MISO.
As described in NiSource’s October 2026 Form 8-K, GenCo will pay for the electricity used to charge the project and have the right to instruct its dispatch. GenCo will receive the economic benefits of available capacity, discharged energy, storage and ancillary services, and applicable environmental attributes, including revenue from sales into MISO markets.
The arrangement separates ownership from commercial use: AGP Group is responsible for building and operating the battery, while GenCo obtains contractual access to its output and services.
| Item | Details |
|---|---|
| Planned power capacity | 600 MWAC |
| Planned energy capacity | 2,400 MWh |
| Expected delivery term | Approximately 20.5 years |
| Initial owner and operator | AGP Group |
Payments cover long-term access, not an upfront purchase
GenCo’s regular storage payments will be calculated using a fixed rate, subject to certain adjustments, and the project’s actual power capacity. The approximately $2.2 billion figure is the expected aggregate of those payments over the delivery term, rather than a disclosed construction cost or upfront purchase price.
NiSource expects the agreement to be accounted for as a finance lease obligation under FASB ASC Topic 842. GenCo also holds an exclusive and irrevocable option to purchase the project at specified intervals during the delivery term and at its end; the filing does not say that option has been exercised.
Contracts and approvals remain execution hurdles
For the agreement to become effective, AGP Group must execute an engineering, procurement and construction contract and an interconnection agreement reasonably satisfactory to it, both by January 31, 2027.
The delivery term is expected to begin when the first phase enters commercial operation, currently anticipated by December 1, 2027. NiSource cautioned that regulatory approvals, supplier and contractor performance, tariffs, severe weather and public intervention or litigation could affect the project. The timetable and payment estimate therefore remain forward-looking expectations.
Conclusion
The next contractual milestone is January 31, 2027, when the construction and interconnection agreements required for effectiveness must be in place. First-phase commercial operation remains a later, expected milestone.
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